Sony to buy out rest of Sony Ericsson for $1.475 billion

Sony will acquire the remaining 50 percent of Sony Ericsson from Ericsson in …

Sony Ericsson announced on Thursday that Sony will buy out the remainder of Sony Ericsson for $1.475 billion. Making Sony Ericsson a wholly owned subsidiary of Sony will allow for better product integration across Sony’s slate of offerings, and will also bolster its patent holdings with ownership of “five essential patent families,” says Ericsson.

Sony Ericsson was formed in 2001 when Sony and Ericsson merged their "unprofitable" handset businesses so that they could make feature phones that were more attractive to consumers. The companies cite the Walkman phone and Cyber-shot phone as “well known examples” of their partnership.

While Sony Ericsson had some success in that area, it has adapted less well to the smartphone market. The company's market share in smartphones rose from 3 to 5 percent since 2010, but the two companies have remained tight-lipped on the performance of its Xperia smartphone line (Sony Ericsson would only say the Android-based Xperia Play was “meeting expectations”).

With Sony Ericsson as a wholly owned subsidiary, Sony will be able to offer consumers “smartphones, laptops, tablets, and televisions that seamlessly connect with one another” to access content, according to a statement issued by Sony CEO Sir Howard Stringer. PlayStation Network and Sony Entertainment Network will figure here, Stringer says. Stringer also notes that the buyout will give Sony ownership of “strategic” IP relating to wireless handset technology.

The decision-making bodies of both companies have approved the transaction, which is set to close in January 2012.

31 Reader Comments

"Sony Ericsson was formed in 2001 when Sony partially acquired Ericsson. "

That's not quite right.... Sony-Ericsson was formed when Ericsson and Sony merged their cell-phone businesses as a joint venture. Sony never acquired Ericsson, in whole or partially. Ericsson still exists, making cell-phone networks and related equipment, and Sony has no ownership in it.

It seems surprising that buying out Ericsson shares will make it more competitive than say, investing $1.475 billion through acquisition of new shares but I guess it matters more to Sony that it is being sold by the parent rather than the child entity.

Sony's entries into the computer/smart-phone market has been hamstrung by the fact that they do not own the OS underlying the products. So they have perpetually been a me-too licensor of Windows and Android, unable to differentiate themselves in the area of information devices. I don't see this changing any time soon.

Sony's entry into the computer/smart-phone market has been hamstrung by the fact that they do not own the OS underlying the products. So they have perpetually been a me-too licensor of Windows and Android, unable to differentiate themselves in the area of information devices. I don't see this changing any time soon.

I don't think owning the OS is all that important. Compare the fortunes of HTC and RIM.

And quite honestly, I think HTC is in the same position in the mobile market as Sony over the long run, unless they really release something remarkable and long-lasting (beyond the latest ephemeral Android showpiece).

With Sony Ericsson as a wholly-owned subsidiary, Sony will be able to offer consumers “smartphones, laptops, tablets, and televisions that seamlessly connect with one another” to access content, according to a statement issued by Sony CEO Sir Howard Stringer.

Erm, shouldn't they be able to do that anyway? You know, using basic, open standards?

And why would the Ericsson half get in the way of that, either way?

When I read that, what it really says to me is: "We want to make devices which only work well together if you *only* buy our stuff", which I'm unlikely to do.

Somehow $1.475 billion seems a bit cheap as Ericsson had quite a good patent portfolio and as everyone knows Google just paid a whopper to Moto for their portfolio...

Ericsson continues as a major manufacturer of mobile infrastructure, it's highly unlikely that they would have given up their essential patents. Shareholders would revolt if they did. It's more likely that Sony has acquired handset related patents that Ericsson may have assigned to the joint venture as part of their investment, or were developed by the joint venture.

It's about time. How long did we wait for a PSP phone, and then they released a halfway effort, and it was always blamed on this step-child relationship of S-E?

My guess is that Ericsson didn't have anything to do with that. SONY is really good a making consumer products that suck all by themselves.

I have nothing against walled gardens a la Apple, as long as everything works seamlessly together. But Sony builds a walled garden around a device, and forgets to put any other devices in there that it is supposed to work with.

Sony has music, film and games studios with a lot of content. They have know-how to build cameras, camcordes, computers, gaming systems, TV's, stereo systems. And they have had this for the past 3-4 decades. But they have never managed to build an eco system or let the devices borrow from eachother in a way that benefits the customer.

My bet: They won't this time either. They are too afraid of cannibalization. If they build a good camera phone they hurt the camera division, if they build a too good gaming phone they hurt the PSP division.

So they make half-assed products that have been crippled by commities from the different divisions and coming up with a compromise.

It could result in some very innovative products if they still have some of the talent from the Clie days kicking around. Could also result in Memory Sticks instead of SD and ugly things like using SonicStage *shudder* to sync music. I guess we'll just have to wait and see how it plays out.

Also as far as patents goes, I'm assuming it would just be ones from the Sony-Erricson joint venture that they are acquiring, not patents that are solely Erricson IP so it might not be a valuable a portfolio as people are thinking. It would still be a good trove of valuable IP, but not nearly on the same scale as the Motorola purchase.

Holy Shit. Right now we are worried about the "Closed" Apple Ecosystem. Can you imagine what it would be like to be a part of the SONY Ecosystem?

Only SONY studios movies will play using the SONY's BLURAY player and SONY's HDMI cable ($200 with a slight modification so you have to buy it from them) on the SONY Bravia television, which can only stand on the SONY's TV Stand.

They will add and delete content and functionality as they please and call you on your SONY Smart phone which has been monitoring your SONY computer for any illegal downloads (by illegal I mean a movie from any other studio).

Somehow $1.475 billion seems a bit cheap as Ericsson had quite a good patent portfolio and as everyone knows Google just paid a whopper to Moto for their portfolio...

Ericsson continues as a major manufacturer of mobile infrastructure, it's highly unlikely that they would have given up their essential patents. Shareholders would revolt if they did. It's more likely that Sony has acquired handset related patents that Ericsson may have assigned to the joint venture as part of their investment, or were developed by the joint venture.

As much as you'll all rag on Sony Ericsson (anyone remember controversies in the early 2000s about how they were propping up African dictators with mobile phones?) I really liked their feature phones immensely. I had a Nokia but bought a Sony phone in late 2004 mostly because it had Bluetooth. Great phone, built like a tank, had nice ringtone features, glowy lights, and gigantic amounts of battery (like, a week's worth). I eventually replaced it in 2010 with the Naite handset. Why? I liked the UI the best of all of the phones I tried in the store. The Naite was also extraordinarily thin, had good battery life, and a nice screen.

So I was a fan of Sony Ericsson products for a while but now that I have a smartphone I don't think I'll buy anything else from them.

Holy Shit. Right now we are worried about the "Closed" Apple Ecosystem. Can you imagine what it would be like to be a part of the SONY Ecosystem?

Only SONY studios movies will play using the SONY's BLURAY player and SONY's HDMI cable ($200 with a slight modification so you have to buy it from them) on the SONY Bravia television, which can only stand on the SONY's TV Stand.

They will add and delete content and functionality as they please and call you on your SONY Smart phone which has been monitoring your SONY computer for any illegal downloads (by illegal I mean a movie from any other studio).

Sony PSN encompassing the PSP, Vita and the PlayStation brands. Hardware can be made to be forced to connect to their servers whenever a game is being loaded through the devices.

This was VERY true. Personally I'd love to see an Android phone from SONY in a more traditional Japanese form-factor released for North America. Too many phones look exactly the same now, some variety would be good.

Maybe something along the lines of the Clie NZ90 form factor (flip phone where the screen can rotate and fold down over the keypad to turn it into a bar phone). http://en.wikipedia.org/wiki/File:Sony- ... G-NZ90.jpg I think that would be a fun design and it has the advantage of only needing one camera that can function as both a front and a back one. (Camera is front-facing when the phone is open, back facing when it's closed with the screen either flipped toward the user or the keys).